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There’s a post-colonial irony to the fate of the British auto industry. Its two most elite names, Rolls-Royce and Bentley, now belong to the Germans, while those two other symbols of the empire, Jaguar and Land Rover, are now owned and operated out of the one-time heart of Britain’s overseas holdings.

Last year, India’s upstart Tata Motors purchased the last two brands from Ford Motor Co. The fire sale generated some much-needed cash for the struggling U.S. maker — but it also offered Tata the opportunity to move into the mainstream of global auto manufacturers.

For Jaguar in particular, the transition has an ironic tinge to it. From the very beginning, critics questioned Ford’s 1989 acquisition of the long-troubled British luxury brand, and after nearly two decades of trying to right the marque, Ford executives reluctantly came to agree. But the sale was completed just as Jaguar launched the replacement for the unloved S-Type sedan. The eagerly awaited XF is the brand’s most well-reviewed offering in decades, racking up a stream of kudos — including being named Car of the Year in Russia and the UK.

There was a time when a product like the XF alone might have reversed Jaguar’s long decline, but today’s luxury market has shifted with competitors like Mercedes-Benz, BMW and Lexus rapidly expanding their product lineups. It’s no longer possible for a single model to prop up an entire brand.

Jaguar hopes to broaden its own appeal with variants of its existing models, largely based on new powertrain packages. But far more critical is the upcoming relaunch of the brand’s flagship, the big XJ sedan. In a move harshly criticized by industry analysts, the current XJ was the product of a massive remake, but the high-tech aluminum spaceframe was clad with in a body that looked virtually identical to the model it replaced – and its sales stalled in part because of it.

That mistake won’t be repeated, asserted Jaguar’s new managing director, Mike O’Driscoll. While the British executive won’t go into detail, numerous spy shots of the 2010 sedan have been surfacing, and the look is anything but retro, having more in common with the XF and Jaguar’s other key offering, the sporty XK coupe.

Beyond the XJ, Jaguar seems certain to keep growing the lineup. “We’d like to build a sports car one day,” hinted O’Driscoll. But for analyst Jim Hall, of 2953 Analytics, in Birmingham, Michigan, there’s an even bigger “hole in the lineup. That’s where the X-Type was,” Hall adds, referring to the oft-derided compact sedan and wagon that failed to pose much of a threat to the likes of the Mercedes C-Class and BMW 3 Series.

Hall, like other observers, believes a replacement will eventually be approved by Tata, but he stresses, “They have to execute it as a Jag, which the X-Type never was. It’s the largest luxury segment in the world, and if they get it wrong, it will only be a cash loss.”

Could still more models to follow? O’Driscoll, during an interview with Motor Trend, aimed to downplay that possibility. Rather than follow Mercedes’ strategy, he explained, “We believe Porsche is a much better-size company to scale ourselves (against), but today, even Porsche is bigger than we are, with a broader product lineup, so we have much left to do.”

Industry insiders reveal much has changed since last June’s acquisition by Tata. For one thing, Jaguar and its new parent have been closely revisiting all the plans put in place by Ford, and there are likely to be significant changes to product programs and other projects.

Observers like Hall believe Jaguar (and sibling Land Rover) is critical for Tata’s ambition to become more than just a third-world maker of cheap and cheerful products like the $2500 Nano. Not surprisingly, the Indian maker has also been hurt by the global financial meltdown, in particular by the rapid downturn in automotive demand in its home market. So it could be some time before it completely cuts ties with Ford, which still provides Jaguar with engineering assistance, gasoline engines and other components.

But it doesn’t take much to recognize there’s a sense of relief for O’Driscoll, no longer having to reach out to Dearborn for everything he needed. “We’re no longer part of a multinational corporation,” he said, noting that rather than having to deal with middle-managers, he deals directly with the company’s CEO, as well as its founder Ratan Tata. “I think we’re a more entrepreneurial company, a faster-moving company, these days, and in the space of 24 months, we’ll pretty much remake the product line and the brand image.”

The sale of Jag by Ford effectively ended the operation of its Premier Automotive Group and marked the loss of its last two British brands — Aston Martin was sold a year earlier. Under Tata, Jaguar Land Rover will continue to function as “one company, two brands,” according to O’Driscoll.

It remains a delicate balancing act, according to knowledgeable sources. Behind the scenes, the two British makers will work aggressively to develop economies of scale. That means sharing underlying powertrains, for example, and other components that can range from heating/cooling systems to infotainment hardware. But facing the market, they’ll continue to operate independently. Or mostly as independents.

In much of the world, they now share showrooms, and where it is possible and practical, subtle effort will be made to convince Jaguar buyers they could also use a Land Rover SUV, and vice versa.

The rebuilding process, for Jaguar, won’t be easy, but the success of the XF shows the brand does have potential. The upcoming launch of the XJ will be a challenge, especially considering the global downturn in luxury sales. But if the market begins to recover, and Jaguar delivers a product that finally lives up to the expectations of a flagship, the company may finally deliver on its long-awaited promise.